Advisers favouring multi-asset funds
- 36% of advisers say they predominantly use multi-asset funds with clients in 2017, up from 18% in 2016
- Popularity of model portfolios dips from 41% to 36% suggesting more advisers are outsourcing investment admin and governance
- Single-strategy funds, stockpicking and DFMs were each used predominantly by only a small proportion of advisers.
The popularity of multi-asset funds has doubled in the last year, as advisers seek to outsource fund selection and asset allocation responsibilities, which can be both complex and costly to maintain. That’s according to new research from Aegon UK, which finds that 36%* of advisers predominantly use multi-asset strategies with clients, up from the 18%** found by a Platforum survey in 2016.
Together with model portfolios, which 36%* of advisers’ report to predominantly use with clients, the two favoured investment strategies are now collectively the most popular for almost three quarters1 (72%) of advisers’ investment strategies. Use of model portfolios is, however, down from 41%** in 2016. The remaining 28% of the advisers who took part said they mainly used single-strategy funds (12%), stockpicking (9%) or Discretionary Fund Managers (DFMs) (8%).
Model portfolios remain popular with advisers, as they facilitate bespoke investment propositions that clients can’t find anywhere else. However, there are signs that the governance responsibilities, cost of investment research, plus the administration involved in gaining client consent for any changes, is driving some advisers toward the multi-asset route.
Nick Dixon, Investment Director at Aegon, said: “We’ve seen a rise in the popularity of multi-asset funds, as advisers face up to greater cost and regulatory pressures, and look to simplify investment administration processes. While some who have large numbers of high-value clients are looking to gain discretionary fund manager permissions, others see multi-asset funds as a cost-effective way of addressing mainstream investment needs.
“However, model portfolios remain the dominant way of building investment strategies, and we expect this to continue for some time to come. This is partly why we have invested so heavily in the online model portfolio functionality used by advisers on our Aegon Retirement Choices platform. Model portfolios aren’t going anywhere soon. Advisers are, and will continue to, find appetite amongst clients for their uniquely tailored portfolios.”
- ENDS –
*Data source: Fieldwork undertaken in March 2017, involving interviews with over 100 IFAs through Aegon’s UK Adviser Panel
**Platforum’s UK Adviser Platform Guide, March 2016. Figures use January 2016 adviser survey data with responses from 259 advisers.
Notes to Editors
- In the UK, Aegon offers retirement, workplace savings and protection solutions to around two million customers and employs approximately 2,100 staff. Aegon UK’s revenue generating investments totalled £59 billion as at 31 December 2015.
- As an international life insurance, pensions and asset management company based in The Hague, Aegon has businesses in over twenty five markets in the Americas, Europe and Asia. Aegon companies employ over 28,000 people and have millions of customers across the globe as at February 2015. Further information: www.aegon.com
- Aegon is the Lead Partner of British Tennis.
Aegon is a brand name of Scottish Equitable plc. Scottish Equitable plc, registered office: Edinburgh Park, Edinburgh EH12 9SE. Registered in Scotland (No. 144517). Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number 165548. An Aegon company. www.aegon.co.uk